NC competitive bidding: 9 exemptions to check first

• Split each request into lines, with one product or service on each line.
• For each line, find the item whose wording matches, or note that none does.
• Record the item number, the seller or contract, and the facts that support the choice.
• Ask the purchasing office or legal counsel to confirm any line where the answer is unclear.
• Check the current statute text before a purchase that depends on an item.

G.S. 143-129 lists these exemptions. This post goes through each one in order, describes the statute's wording, and explains what to check before you rely on it.

This post covers only North Carolina's statute. Rules in other states are not covered here. Read the official page alongside this list, since it has the exact wording of each item.

Each item can be checked in three steps: identify the kind of purchase or work the item names, identify who the seller or contract is, and identify any condition the item sets. It is worth reading each item slowly, because the conditions are in the wording. The notes under each item describe the statute's wording and what to check against it. They do not add any condition of their own.

The 9 items cover purchases from the federal government or other government units, special emergencies involving health and safety, certain group purchasing programs, continuing construction or repair projects, fuel and motor oil, products with no real competition, information technology contracts, guaranteed energy savings contracts, and purchases from state contracts. Each one is covered in its own section below, in the statute's order.

Item (1) exempts the purchase, lease, or other acquisition of apparatus, supplies, materials, or equipment from the United States of America or any agency of the United States, or from any other government unit or agency within the United States. The item turns on who the seller is. A purchase from a private parts supplier, fuel vendor, or equipment dealer is not a purchase from a federal agency or another government unit inside the United States, so this item does not describe that purchase.

Before you rely on the item, confirm that the seller really is a federal agency or government unit and that what you are acquiring is one of the listed kinds: apparatus, supplies, materials, or equipment. Keep the seller's identity in the purchase file, so anyone who reviews the order can see why this item applied.

Item (2) covers cases of special emergency involving the health and safety of the people or their property. The wording has two parts that both matter: the case must be a special emergency, and it must involve health and safety or the people's property. Check both parts against your facts. Do not stretch either one to fit a purchase you want to make. A planned need alone does not establish a special emergency involving health and safety or property.

When you use this item, write down the facts that made the situation an emergency, when they arose, and how the purchase responded to them. A dated record makes the connection between the emergency and the buy easy to follow for anyone who checks the file later.

Item (3) covers purchases or repair work that combine installation labor and equipment acquisition, made through a competitive bidding group purchasing program. The statute defines that program as a formally organized program that offers competitively obtained purchasing services at discount prices to two or more public agencies.

An arrangement that is not formally organized is not what the definition describes. The item is worded around purchases that combine installation labor and equipment acquisition, so check whether your order has that combination before you use it.

Item (4) exempts construction or repair work undertaken during the progress of a construction or repair project initially begun under G.S. 143-129. The item is about work that continues an existing project. It does not describe a brand-new job that happens to be similar to an earlier one.

To use this item, be able to show the original project, the point where the new work joins it, and the connection between the two. Whether later work is part of the same project is a question to answer from the project's history and paperwork, not from the type of work involved.

Item (5) covers purchase of gasoline, diesel fuel, alcohol fuel, motor oil, fuel oil, or natural gas. This item names specific products, so each line on an order can be checked against the list. If a line is a product the item names, the item applies to that line.

Anything not named in the item needs its own check under another item. Lubricants other than motor oil, additives, and other supplies are not named in item (5). Propane is not on the item's list either, so a propane order needs its own check as well. A single order can therefore contain lines that fall under this item and lines that need a different answer, so review them separately.

Item (6) covers purchases of apparatus, supplies, materials, or equipment when performance or price competition for a product is not available, when a needed product is available from only one source of supply, or when standardization or compatibility is the overriding consideration. The statute lists three separate tests, and any one of them can apply on its own.

For parts, the single-source test and the standardization test ask about the product itself. The file should show what the product is, why it is needed, and who supplies it. If the reason is compatibility with equipment already in service, write that down with the model or part details. If the reason is that only one source can supply it, record how you reached that conclusion. The statute's wording asks whether the product is available from only one source, so the record should support that point directly.

Item (7) covers purchases of information technology through contracts established by the Department of Information Technology, as provided in Article 15 of Chapter 143B of the General Statutes. The item is tied to contracts that the Department establishes. It does not describe every information technology purchase.

Before you rely on this item, confirm that the vehicle you plan to use is a contract the Department of Information Technology established. Then check that the thing you are buying is information technology under that contract. A purchase that is not made through one of those contracts is outside what this item describes.

Item (8) covers guaranteed energy savings contracts, which the statute says are governed by Article 3B of Chapter 143 of the General Statutes. The item points to another article for the governing rules, so the item by itself does not tell you how those contracts work.

If you plan to use this item, read Article 3B itself before you rely on it. Ask your purchasing office or legal advisor to confirm that the contract is the kind Article 3B governs.

Item (9) covers purchases from contracts established by the State or any agency of the State, if the contractor is willing to extend to a political subdivision of the State the same or more favorable prices, terms, and conditions as established in the State contract.

Before you buy, confirm that the contract was established by the State or one of its agencies. Then confirm that the contractor is willing to extend the State contract's prices, terms, and conditions to your office. Compare the offered prices and terms with the State contract itself, because the item asks for the same or more favorable terms, not merely similar ones.

Suppose an order includes diesel fuel, a replacement part available from only one source, and hand tools. Check each line separately.

The diesel line falls under item (5), because diesel fuel is one of the products the item names. The replacement part may fall under item (6) if the file shows that a needed product is available from only one source of supply, or that standardization or compatibility is the overriding consideration. The hand tools are not diesel fuel, so item (5) does not reach them. They need their own check against the wording of the items, and they should not be placed under an exemption just because they arrived on the same order.

Read the exact item in G.S. 143-129 before you rely on it, because a short summary can drop a condition. Each item above has its own words, and a purchase has to match those words, not just the general topic. An order for a part that is needed on a planned schedule, for example, does not match the emergency item just because a machine is out of service.

Write down which item you relied on, the seller or contract involved, and the facts that made the purchase fit. A short note like this helps anyone who reviews the file later. For large or unusual purchases, ask your purchasing office or attorney to confirm the item before the order goes out. Treat this list as a starting point for that review, not a replacement for it.

When more than one item seems to apply, choose the one whose wording matches the facts most closely, and write down the reasons. A single purchase may fit more than one item, and some purchases may fit none. When none seems to apply, the purchase may need to go through the normal process rather than an exemption. For that separate process, see North Carolina bid withdrawal deadlines.

Note any doubt in the file, even if you decide the purchase is covered. A record that shows the question was considered is more useful than one that presents a conclusion with no support behind it.

Keep records that name the item, the quoted wording, and the facts behind each purchase. A purchase file is most useful when it explains the decision, not only the result. Keep the request, the item you relied on, the quoted wording or a link to it, and the date you checked the statute. If the exemption depends on facts, such as an emergency, a single source, or the history of a project, keep the documents that show those facts.

Records also help when the purchase is reviewed later by someone who was not involved. A short memo that connects each fact to the item's words is easier to follow than a memory of why the order was placed. Store the memo with the invoice and the order so that the three can be found together. For related job paperwork, see the work order checklist for dispatch handoffs.

Ask the seller questions that test the facts each item depends on, before you rely on that item. For a government seller, ask which agency or government unit it is. For a state contract, ask whether the contractor is willing to extend the same or more favorable prices, terms, and conditions to your office, and ask for that answer in writing. For a group purchasing program, ask how it is organized and which public agencies it serves.

Write down the answers and the date you received them. If a seller cannot answer clearly, treat the item as unconfirmed and ask your purchasing office before you order.

This post does not describe how a bid is run once a purchase is required to go through one. The statutory wording comes from the official North Carolina General Assembly page linked above.

Statutes can be amended, so confirm the current text on that page before a purchase. Nothing in this post replaces advice from your purchasing office or legal counsel.

Start by listing the parts, fuel, and equipment your office buys. For each line on the list, go through the 9 exemptions in order and note which one, if any, might apply. Use the wording of each item, not your memory of it, and keep the notes with the purchase records.

Share the list with the people who approve orders. When everyone uses the same item numbers and the same wording, it is easier to check a purchase quickly and to explain the decision later.

No, item (1) covers purchases from government sellers. Confirm the seller's status before you place the order, and keep a copy of whatever document shows it.

Yes, item (5) expressly names motor oil. Still, check the exact product name on the order against the item, since the item lists specific products and not a general category of fuels and lubricants.

The prices, terms, and conditions must be the same or more favorable to the political subdivision. Get that willingness confirmed, and compare the terms against the State contract itself.